Whether Macau Pataca Should Shift Currency Peg Form Hkd to Rmb
Table of Contents
Introduction1
Background information of Macau Pataca1
The prospective of RMB3
The prospective of HKD4
The analysis of whether Macau MOP should shift currency peg form HKD to RMB 6 1.1.1 From Macau Pataca should peg with RMB point of view6 1.1.2 From Macau Pataca should peg with HKD point of view 7
Conclusion8
Reference9
1. Introduction
There are many reasons to celebrate Macau’s economic growth which enabled Macau push up the exchange rate of domestic currency Pataca. Unfortunately, the Pataca has been depreciating rapidly the currency RMB, its largest trading partner mainland. Macau Pataca fell from 1.03 Yuan/MOP at July 2005 to 0.85 Yuan/MOP in April 2009. Base on the past three and half years record, we can say the falling is never reach the end.
2. Background information of Macau Pataca
The Pataca has been the legal tender in Macau for almost a century. It had originally been pegged with the Portuguese escudo at a rate of one Pataca equivalent to five escudos. In 1977, because of the sharp devaluation of the escudo after the Carnation Revolution in Portugal, Macau responded by uncoupling the Pataca from the escudo on 7 April and pegging it to the HKD 0.3 The Macau Government had failed to set the Pataca at par with the HKD twice after the establishment of the official link. Since the late 1980s, the Macau Pataca has been pegged to the HKD at 1.03MOP:1HKD. The prevailing CBA requires the two note-issuing banks, the BOC and the BNU to deliver HKD to the Monetary Authority of Macau (AMCM) in return for the non-interest bearing certificates. The HKD receipts are then counted as part of the official foreign exchange reserves held in the AMCM. In 1983, the Sino-British dispute over the future of Hong Kong sparked a confidence crisis in Hong Kong. To pre-empt the weakening in confidence from deteriorating into a full-blown economic crisis, the Hong Kong Government
Introduction1
Background information of Macau Pataca1
The prospective of RMB3
The prospective of HKD4
The analysis of whether Macau MOP should shift currency peg form HKD to RMB 6 1.1.1 From Macau Pataca should peg with RMB point of view6 1.1.2 From Macau Pataca should peg with HKD point of view 7
Conclusion8
Reference9
1. Introduction
There are many reasons to celebrate Macau’s economic growth which enabled Macau push up the exchange rate of domestic currency Pataca. Unfortunately, the Pataca has been depreciating rapidly the currency RMB, its largest trading partner mainland. Macau Pataca fell from 1.03 Yuan/MOP at July 2005 to 0.85 Yuan/MOP in April 2009. Base on the past three and half years record, we can say the falling is never reach the end.
2. Background information of Macau Pataca
The Pataca has been the legal tender in Macau for almost a century. It had originally been pegged with the Portuguese escudo at a rate of one Pataca equivalent to five escudos. In 1977, because of the sharp devaluation of the escudo after the Carnation Revolution in Portugal, Macau responded by uncoupling the Pataca from the escudo on 7 April and pegging it to the HKD 0.3 The Macau Government had failed to set the Pataca at par with the HKD twice after the establishment of the official link. Since the late 1980s, the Macau Pataca has been pegged to the HKD at 1.03MOP:1HKD. The prevailing CBA requires the two note-issuing banks, the BOC and the BNU to deliver HKD to the Monetary Authority of Macau (AMCM) in return for the non-interest bearing certificates. The HKD receipts are then counted as part of the official foreign exchange reserves held in the AMCM. In 1983, the Sino-British dispute over the future of Hong Kong sparked a confidence crisis in Hong Kong. To pre-empt the weakening in confidence from deteriorating into a full-blown economic crisis, the Hong Kong Government